Be warned: borrowing money from a private individual carries risks!


Now that you are an independent earner, it is time for that cool car that you have been yearning for. But you need a loan for that. Unfortunately you only work, so you don’t have to try it at the bank. Suppose your parents want to lend you that, then you are out of the fire. But is that a good idea?

Borrowing money from a private individual means that no financial institution is involved. For example, it could be your brother, a good friend, or your partner who borrows the money. However, there is a greater chance that you will borrow too much if you know the person well. If you are an only child, there are few clouds in the sky, but you may have a brother and sister. Do they find that a good idea? Maybe they also want to borrow money from mom and dad, but they can’t provide credit to 3 kids. This can cause a lot of unrest within the family, and that is the last thing you want.

Private loan

Private loan

You can also get a loan from a private individual by checking the advertisements in the newspaper. Private individuals offer loans therein. However, there are serious risks associated with both parties for both parties. For the person who lends you the money, the risk is mainly that you cannot pay off the loan, that is clear. But for you as a recipient there can be hooks and eyes to such an action.

First, you need to study the borrowing behavior of the unknown provider. For that you have to dig through the internet to see what the comments of other borrowers are. Quite time-consuming. In addition, a watertight contract is of great importance. This must be drawn up by the notary and can cost a lot of money. In the case of borrowing money from a private individual, the interest is usually also considerably higher than in the case of banks and other lenders. This is because no checks are made on any previous loans you have taken out, and because the lender is taking a risk with regard to the repayment. He doesn’t know you.

Which lender?

Which lender?

There is another type of lender than your parents, the stranger or the bank. These are financial institutions that only specialize in loans. They are in possession of a license issued by the Belgian government, and therefore have permission to grant you a credit. Because there are so many providers, you can quickly determine on your laptop who is offering you the cheapest credit (tip: the lower the APR, the cheaper the loan is usually). Click on the provider and request a free quote via the loan simulator. You enter some data, such as the amount and duration, and within 2 minutes you know what your monthly payment will be. So it is a lot safer than borrowing money from a private individual, and it gives a mature feeling to just arrange it in your uppie.